Prohibits deceptive acts or practices that misrepresent or omit material facts.
Definition
Excerpt
(a)Declaration of unlawfulness; power to prohibit unfair practices; inapplicability to foreign trade
(1)Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.
(2)The Commission is hereby empowered and directed to prevent persons, partnerships, or corporations, except banks, savings and loan institutions described in section 57a(f)(3) of this title, Federal credit unions described in section 57a(f)(4) of this title, common carriers subject to the Acts to regulate commerce, air carriers and foreign air carriers subject to part A of subtitle VII of title 49, and persons, partnerships, or corporations insofar as they are subject to the Packers and Stockyards Act, 1921, as amended [7 U.S.C. 181 et seq.], except as provided in section 406(b) of said Act [7 U.S.C. 227(b)], from using unfair methods of competition in or affecting commerce and unfair or deceptive acts or practices in or affecting commerce.
(3)This subsection shall not apply to unfair methods of competition involving commerce with foreign nations (other than import commerce) unless—
(A)such methods of competition have a direct, substantial, and reasonably foreseeable effect—
(i)on commerce which is not commerce with foreign nations, or on import commerce with foreign nations; or
(ii)on export commerce with foreign nations, of a person engaged in such commerce in the United States; and
(B)such effect gives rise to a claim under the provisions of this subsection, other than this paragraph.
If this subsection applies to such methods of competition only because of the operation of subparagraph (A)(ii), this subsection shall apply to such conduct only for injury to export business in the United States.
(4)
(A)For purposes of subsection (a), the term “unfair or deceptive acts or practices” includes such acts or practices involving foreign commerce that—
(i)cause or are likely to cause reasonably foreseeable injury within the United States; or
(ii)involve material conduct occurring within the United States.
(B)All remedies available to the Commission with respect to unfair and deceptive acts or practices shall be available for acts and practices described in this paragraph, including restitution to domestic or foreign victims.
Related cases
The FTC sued LendingClub and found the company liable for deducting hidden up-front fees from loans and failing to provide consumers with clear and conspicuous privacy notices. Despite claiming "no hidden fees," LendingClub was found to have charged borrowers hundreds or even thousands of dollars in undisclosed fees.
Vonage was held liable by the court for charging customers without their consent, failure to provide required disclosures, and not offering simple mechanisms for customers to cancel their telephone services.
ABCmouse agreed to pay $10 million and change its marketing and billing practices after the FTC found it misled consumers about cancellations, withheld information and charged memberships without consent.
Vizio Inc. was found guilty of unauthorized tracking and failing to provide information before collecting and sharing their television viewing information.
HomeAdvisor was fined for misleading users about the cost of an optional one-month subscription and making false representations about its services.
Progressive Leasing was held liable for misleading consumers to pay more than the sticker price for items by hiding the cost behind a non-descript dropdown arrow
Credit Karma was fined for using false "pre-approved" claims, to entice consumers into applying for credit card offers they often did not qualify for.
Lord & Taylor was charged for misleading consumers with undisclosed paid promotions and influencer endorsements.
LendEDU was fined for promoting products in exchange for a fee and posting fake positive reviews on its website.
Sage Auto coerced users to sign different contracts, charged for unauthrosied add-ons and faked its reviews.
UrthBox engaged in offering a supposedly "free" trial without adequately disclosing hidden subscription charges and misrepresenting consumer reviews as independent.
Ed Napleton Automotive Group was held liable for imposing unauthorized "junk fees" by sneaking unwanted add-on products.
MyLife.com was held liable for luring consumers in hard-to-cancel subscription programs and deceptive billing practices.
Health Formulas was held liable for fraudulent "free trials" luring consumers into enrolling for a membership program.
FTC enforcement action against Amazon relating to Amazon Prime subscription, including explicit mappings in the complaint to five types of "dark patterns"
Related deceptive patterns
The user is enticed with a low advertised price. After investing time and effort, they discover unexpected fees and charges when they reach the checkout.
The user finds it easy to sign up or subscribe, but when they want to cancel they find it very hard.
The user is unknowingly enrolled in a recurring subscription or payment plan without clear disclosure or their explicit consent.
The user is drawn into a transaction on false pretences, because pertinent information is hidden or delayed from being presented to them.
The user is misled into taking an action, due to the presentation of confusing or misleading language.
The user is misled into believing a product is more popular or credible than it really is, because they were shown fake reviews, testimonials, or activity messages.
The user wants to do something, but they are required to do something else undesirable in return.
The user expects to see information presented in a clear and predictable way on the page, but it is hidden, obscured or disguised.
The user is faced with barriers or hurdles, making it hard for them to complete their task or access information.
The user is emotionally manipulated into doing something that they would not otherwise have done.